Setting Up Finance Charges

Use this procedure to set up finance charges in the software.

Finance charges are usually set up once a month, or as needed.
Important: Transaction codes defined in the Accounts Receivable Installation screen must be set up in Accounts Receivable Transaction Code Maintenance.
  1. Open the Installation > Accounts Receivable screen.
  2. On the Properties tab, designate a default finance charge transaction code at the Default finance charge transaction code field. Click OK.
  3. On the Transaction Code File Maintenance screen, set up the necessary transaction code for the finance charges you are issuing. The G/L account code should be named "Interest Income", or something similar. This code should already exist as defined in the Accounts Receivable Installation screen.
  4. Open the Finance Charge Entry screen.
  5. Click the Calculate button. The Finance Charge Calculate screen calculates finance charges for customers with overdue balances using the finance transaction code assigned to the selected customer(s).
  6. At the Period end date field, enter the period end date for the period in which you want to calculate finance charges.
  7. At the Number of days grace period field, enter the number of grace period days, if any. If there is not a grace period, press Enter.
  8. At the Minimum finance charge field, enter the minimum finance charge applicable to all customers, and then click OK. If the calculated figure is less than the minimum, the minimum will default.
  9. Click the Preview button and review the report for accuracy.
  10. Click OK to return the Finance Charge Entry/Change screen.
  11. Click the Update button.
  12. Select Continue.
  13. Verify your finance charge settings are correct.
    Note: When working in the Finance Change Entry/Change screen, the calculated amounts can be overridden in the Finance charge field. This is handy if you choose to set up divisionalized finance payments.